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Culprits change, but health care fraud follows familiar patterns

Each health care fraud case is its own unique story, but many deal in some of the same themes, or have similar ingredients and characters.

A ringleader dreams up a plan to bill for unnecessary or bogus health care services in a health care field where he or she expects to find little oversight. Patients who need a meal or extra cash often meet one of the ringleader's recruiters and turn over their Medicare or insurance account numbers for purposes unknown.

And in some cases, a doctor, pharmacist or other medical professional gets involved in the crime.

Of the $380.2 million-plus in Medicare billings pegged as fraud regionally in 2013, $225 million is attributed to oncologist Farid Fata, owner of Rochester Hills-based Michigan Hematology Oncology Centers PC and founder of the nonprofit Swan for Life Cancer Foundation, who leased office space at Crittenton Hospital Medical Center.

The U.S. Department of Justice contends Medicare actually paid at least $91 million to Fata's company over the past six years, including $48 million for chemotherapy and other cancer drugs.

Christopher Andreoff, partner at Southfield-based Jaffe Raitt Heuer & Weiss PC and defense attorney for Fata, said the doctor maintains his innocence and has sought release on bond but remains in custody awaiting trial.

In another case, Babubhai Patel owned or controlled most of a network of 20 Southeast Michigan pharmacies and was the alleged ringleader in some home health care fraud and prescription fraud.

More than 20 Southeast Michigan pharmacies owned or controlled by Patel were used to fill prescriptions that were sold or distributed illegally, or stored in basements and returned to wholesalers. Doctors were also paid to sign prescription orders and recruiters offered $100 to people in Detroit homeless shelters and soup kitchens for their Medicare or Medicaid patient numbers.

Patel, 51, of Canton Township, owned or operated pharmacies at six locations in Detroit, three in Warren, nine in Oakland County, two in Bay City and elsewhere, according to federal officials.

More than $70 million of the $143.3 million of billings outlined by Justice in various 2011 court cases was tied to the Patel scheme. The indictment doesn't break out how much money Medicare paid out in that case, but he was ordered in February 2013 to pay $19 million in restitution, and serve 17 years in prison.

Federal Medicare fraud indictments quite commonly allege about the same ratio of billings to actual reimbursements, in other cases.

But federal officials in the Patel case have obtained restitution orders of more than $1.7 million for Blue Cross Blue Shield of Michigan this year alone, as a private insurer fraudulently billed along with Medicare in that scheme. Prosecutors allege more than 35 pharmacists, doctors, patient recruiters and others conspired to bill Medicare and Medicaid more than $70 million.

In the Fata prosecution, federal officials allege tens of thousands of dollars were also unnecessarily billed to Blue Cross, along with Aetna Inc. and Health Alliance Plan of Michigan over and above his Medicare billings. Fata awaits a July conference date and an Aug. 12 trial on a 14-count indictment.

Medicare usually pays only a fraction of claims in each alleged conspiracy by the time it is investigated and indicted by Justice officials. For example:

• A 2012 indictment of social worker Louisa Thompson and co-defendant Checarol Robinson for alleged bogus billing for mental health services, for example, alleges that Medicare paid out about $4 million on $20 million in claims through Detroit-based TGW Medical Inc., Caldwell Thompson Manor Inc. and P&C Adult Day Center LLC.

• A 2012 prosecution of Raymond and Emelitza Arias alleges that Westland-based Elite Wellness LLC submitted $12.5 million in Medicare claims for infusion and injection therapy for treating patients with HIV, of which the program paid out about $3.8 million from 2009 through last year.